Luis, a small business owner, takes out a house loan of $$130,000$ at an annual interest rate of $7\%.$ He pays a fixed monthly installment of $$2,700$ toward his loan repayment. Should Luis default on the loan, the creditor has placed a lien on his house as collateral.

Which of the following statements is true about Luis' situation?

Luis is required to repay the principal amount but is free from paying any additional finance charges.

The creditor can sell Luis' house to recover any outstanding payments if Luis fails to repay the loan.

Luis can expect to pay more than $7\%$ interest on his loan, especially near the end of his loan term.

The creditor can sell Luis' business should he default on the payments defined by the loan agreement.